Demand rises for post-consumer plastic
Through 2016, growth in domestic plastic recycling is described as healthy but not tremendous by Kent Furst, senior polymers analyst at Cleveland market research firm The Freedonia Group. U.S. demand for post-consumer recycled plastic is expected to rise 5.9 percent annually to nearly 3.4 billion lbs. in 2016, according to a new study Furst authored.
Behind that overall trend are a number of smaller developments, ranging from greater use of lightweight plastic packaging to more interest in energy recovery, that will shape plastics recycling in the next few years. Plastic recycling has the potential to grow more strongly, but not until all participants get their acts together. The anticipated collection growth rate of five to six percent annually is somewhat less than anticipated growth in demand, Furst noted, highlighting the challenge of collecting sufficient material to meet demand.
“It’s the nature of recycling markets that everything has to come together – collection, processing capacity, end-user demand and pricing – for the industry to be successful, and this is why we are unlikely to see stronger growth going forward,” Furst said.
Not all forces are under the control of the players in the domestic industry. “The export market is always a major wild card in the plastics recycling industry, since so much scrap plastic collected in the U.S. is sent overseas,” Furst noted. “China has enacted stricter controls on scrap plastic imports in the last year that should reduce volumes, but it is always unclear how tightly these measures will be enforced.”
One of the major domestic developments Furst sees is increasing involvement by beverage bottlers and other major consumer products brands. “These companies are becoming increasingly focused on sustainability, including the use of recycled plastic content and the recyclability of their products,” he said. “In addition to generating demand for recycled plastic resin, brand owners are shifting the industry dynamic by making direct investments in recycling operations, though joint ventures and major purchasing agreements.”
Furst warned that the modest increases in collection of plastics for recycling, coupled with rising exports, creates a problem. “Something will have to give – either increases in collection or decreases in scrap plastic exports – or a lot of processors will go out of business,” he said.
A trend toward lighter plastic bottles has made conditions tougher for collectors and processors, since lower-density materials challenge conventional recycling business models. “However, the total volume of plastic bottles in the marketplace will continue to increase,” Furst said, “so it’s not like there will be a shortage of recyclable material available to process.”
He also identified contamination of plastic in the recycling stream as a big issue. “Although improved sorting technology has made it easier to process mixed waste streams, yield rates for plastic recyclers have fallen sharply in recent years,” he said. “Non-compatible labels, adhesives and inks have also not helped.”
While bottle recycling rates seem to have plateaued, new sources of recycleable plastics have been growing. Furst expects collections of thermoformed PET containers, rigid HDPE and PP packaging to grow substantially over the next five years.
Steve Russell, vice president of plastics at the American Chemistry Council in Washington, D.C., likewise identified as an important trend the expansion of recycling to more containers, especially non-bottle rigid plastics used in applications such as yogurt cups and electronics housings. “There’s been dramatic growth in recycling of those,” he said. In 2010, according to a study sponsored by the council, nearly 820 million lbs. of post-consumer rigid plastics were collected for recycling nationwide, up 72 percent from 2009 and 154 percent since 2007.
Film is another growth area. Recyclers recover about 1 billion lbs. of pallet wrap, newspaper bags, dry cleaning bags and other plastic films annually, Russell said, and that amount is up by 50 percent from 5 years ago. He credits growing consumer awareness that they can recycle more types of plastic wrap at more collections points.
Russell also points to single-stream collection programs as an important trend in plastic recycling “When communities are adopting recycling programs, they are increasingly initially adopting single-stream,” he said. “When communities are revising their recycling, they’re most often revising toward single stream.”
As single-stream recycling grows, so does consumer confidence that materials are recyclable. “So more material is getting into the system,” Russell said. “That’s having an effect on the amount of high-quality materials being recovered from the stream.”
Another important trend, according to Russell, is more interest in integrated recycling operations that focus on energy recovery. Following the example of Europe, U.S. cities are starting to look at combining mechanical recycling with energy recovery as way to avoid landfilling. Increasingly, they’re recognizing that plastics have significant energy content, and examining technologies such as pyrolysis and gasification as means to harvest that energy while diverting materials from landfills.
“That’s increasingly attractive here in the US, particularly as we think about ways to meet alternative energy needs,” Russell said. It’s even more appealing in states that have mandated landfill diversion targets. “Communities are increasingly finding that municipal solid waste is a way to help them get there,” Russell said.
Although for the next several years growth will be moderate, the long-term plastic recycling outlook is strongly positive. For instance, Furst said that added processing capacity on the West Coast is likely to significantly reduce exports to China and the effect of that wild card on the industry.
In general, greater awareness of and interest in plastic recycling by all the players in the field is likely to increase and drive growth. “If brand owners continue to see the value of plastic recycling and participate in the industry,” Furst said, “we may begin to see things like expanded container deposit laws and extended producer responsibility programs – measures which have the potential to really boost recycling rates in the US.”